Tax Preparer Accused of Claiming Losses on Crypto Assets Never Owned

A Connecticut tax preparer allegedly reported phantom cryptocurrency losses for clients who never traded digital assets. These charges stem from a larger federal case that was launched over fake tax write-offs and stolen refund payouts.

Prosecutors Claim Crypto Losses Were Reported on Assets Never Owned#

Fabricated crypto losses were allegedly listed on returns prepared by Yuri’s LLC owner Yuridia Trujillo in Meriden, Connecticut, officials revealed on October 22. IRS investigators uncovered a widespread scheme spanning over 4,300 filings completed between 2017 and 2024.

Federal prosecutors allege that numerous returns featured bogus claims for retirement savings, childcare expenses, side businesses, and rental properties. Authorities highlighted these widespread fabrications in an official statement that was released alongside the charges:

“… fictitious losses for the buying and selling of stocks and cryptocurrency that clients never owned”

In addition, Trujillo allegedly exploited Form 8888, which lets filers divide direct deposits across three separate accounts, to funnel fractions of clients’ payouts into accounts that were controlled by her and a partner.

Federal grand jurors handed down the indictment on October 7, leading to her arrest two days later. Following her release on $50,000 bail, Trujillo faces a potential three-year prison sentence for each count of assisting in fraudulent return preparation. Officials emphasize that these accusations remain unproven and she is presumed innocent unless prosecutors prove guilt beyond a reasonable doubt in court.

How Investment Losses Can Lower Your Taxable Income#

Under standard U.S. crypto tax rules, investors can use genuine losses from digital assets to offset taxable capital gains. A capital loss typically occurs whenever someone sells an asset below its original purchase price after factoring in adjustments that were applied over time.

If net investment losses surpass overall gains, filers can typically write off up to $3,000 against ordinary earnings, or $1,500 for married couples filing apart. Furthermore, federal rules allow excess losses that were carried forward to offset taxable income in future years.

Official rules require detailed transaction records—such as receipts, sale logs, trades, and historic market values—to verify every figure filers submit. Standard reporting practices mandate using Form 8949 to calculate individual investment results, which tax preparers then summarize on Schedule D to compute net capital gains and allowable write-offs.

False Cost Figures and Broader Broker Reporting Rules#

Exaggerating an asset’s initial purchase price can similarly shrink reported profits, as shown by Frank Richard Ahlgren III’s guilty plea in a separate Texas prosecution. The Austin investor deliberately padded the acquisition cost of bitcoin that was sold throughout 2017.

Justice Department officials later announced that Ahlgren received a two-year prison sentence on December 12, 2024, for fraudulent crypto filings. In addition, the court ordered him to pay over $1 million in financial restitution that was owed to the federal government.

Updated federal reporting rules now give tax authorities greater visibility into digital asset trades following regulations finalized in 2024. Platforms must report total gross proceeds from 2025 sales in 2026, while cost-basis details for select 2026 transactions will follow under guidelines that were designed to take effect in 2027.